Tesla scraps Musk’s $29B interim pay plan after Delaware court reinstates larger compensation package

Tesla has revoked the $29 billion “interim” compensation package it awarded to CEO Elon Musk last year, following a recent Delaware Supreme Court decision reinstating his larger $56 billion compensation award originally granted in 2018.

The company had issued the interim package in August 2025 as a safeguard in case Delaware’s highest court rejected Musk’s appeal. Tesla had previously told investors that the interim award would be void if Musk ultimately prevailed. “[T]here cannot be any ‘double dip’,” the company stated last year.

Tesla confirmed in its quarterly filing with the U.S. Securities and Exchange Commission on Thursday morning that the interim award was terminated on April 21. The company also noted that the board vote was conducted without Elon Musk or his brother Kimbal Musk, who also serves as a director.

“These actions are consistent with the ‘no double dip’ principle, which precludes Mr Musk from getting a windfall if he may exercise the 2018 CEO Performance Award,” Tesla wrote in the filing.

The $56 billion compensation package was originally granted to Musk in 2018. It was later challenged by a shareholder who alleged that Musk negotiated the deal with insufficient transparency and failed to inform investors properly. After years of litigation in Delaware’s Chancery Court, a judge ruled in 2024 in favour of the plaintiff and struck down the compensation plan.

Tesla responded with a sustained public campaign while appealing the ruling to Delaware’s Supreme Court. The company also held a “re-vote” on the package, arguing that shareholders had not been misled. During this period, Musk threatened to leave Tesla to pursue artificial intelligence ventures elsewhere, prompting the board to introduce the $29 billion interim package as a contingency measure. Tesla also began working on a far larger compensation structure valued at up to $1 trillion.

The cancellation of the interim award does not affect Musk’s $1 trillion long-term compensation plan. To unlock its full value, Musk must guide Tesla through major operational milestones, including delivering 20 million vehicles, deploying 1 million robots, and launching 1 million robotaxis, while also increasing the company’s valuation to beyond $8 trillion over 10 years.

In its filing, Tesla also disclosed that it has begun internally estimating the likelihood that Musk will achieve certain milestones under the trillion-dollar package. While the company did not specify which goals it believes are achievable, it stated it has “unrecognised stock-based compensation expense of $9.97 billion for the operational milestone that was considered probable of achievement over the term of the award.”

At the same time, Tesla reported “unrecognised stock-based compensation expense of between $105.82 billion to $120.37 billion for the ‘operational milestones that were considered not probable of achievement,’” without detailing which targets those refer to.

Although Musk has a decade to meet all requirements under the proposed $1 trillion package, many of the milestones are scaled versions of long-standing ambitions he has previously outlined. Even so, Tesla itself appears uncertain about the likelihood of achieving at least some of them.

The company also disclosed that its board has imposed restrictions on how and when Musk can sell shares under the reinstated 2018 award, aimed at reducing potential market disruption from large-scale share sales.

These restrictions align with broader conditions in the proposed $1 trillion package, which require Musk to remain CEO or a product development executive through at least 2028 for shares to vest, and to hold those shares for a minimum of five years.